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A Minority View: Higher Minimum Wage

Mr. Right Wrote: Feb 27, 2013 6:03 AM
The demand for healthcare keeps going up in spite of it being more expensive precisely because bills are paid through insurance - the end user never sees the real cost. If I go to a restaurant with high prices, I'll order frugally if I pay the bill. If you're paying, however, I'll eat a good deal more extravagantly because the high prices won't affect me.

In his State of the Union address, President Barack Obama proposed raising the minimum wage from $7.25 an hour to $9 an hour. That would be almost a 25 percent increase. Let's look at the president's proposal, but before doing so, let's ask some other economic questions.

Are people responsive to changes in price? For example, if the price of cars rose by 25 percent, would people purchase as many cars? Supposing housing prices rose by 25 percent, what would happen to sales? Those are big-ticket items, but what about smaller-priced items? If a supermarket raised its prices by 25 percent,...